M4 Does size matter - Does size matter Most of the examples...

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Does size matter? Most of the examples in the text are medium or large companies. Think about the concepts of risk which are part of this section of the course in the context of the size of a firm. Would these change if the firm were large? Small? Medium-sized? Why or why not? Provide an example in your post to add some specificity to your ideas.Companies, regardless of size, tackle investments which bear different grades of risk. “In the most basic sense, risk is a measure of the uncertainty surrounding the return an investment will earn” (Gittman, 2015, p. 316). The investments assumed by a company will depend on the company’s risk propensity. Large companies have the ability to make investments in enterprises that could have the potential for high returns. A large firm is more likely to have the ability to invest in high risk projects, while small and medium sized companies are more restricted with their ability to invest and therefore tend to have a lower appetite for risk.Large companies have advantages over small and medium-sized companies, namely economies of scale because of branding and history, as well as a more diversified revenue stream and risk profile. Large firms have the ability to hire specialists in finance to research and forecast in-depth financial planning and management of their risk profile. They are further able to take advantage of spreading the risk over several projects. A large company could have thousands of products in diverse areas, while a small company may only be able to concentrate on a few products (Feldman, 2014). Large companies can more easily raise funds for projects by selling shares of stock to the public and by selling corporate bonds.Newly formed small businesses typically obtain financing from the owners own savings, small business loans from the bank, and gifts or loans from friends or family. More established small companies and medium-sized companies could obtain financing from outside investors and funds from venture capital firms. Small businesses tend to carry unique

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